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Budget proposal
Draft 2018 budget for Ministry of Finance sector

Ministry of Finance
Publication date 10.8.2017 12.34
Press release

The Ministry of Finance’s budget proposal for 2018 covering the administrative sector for which it is responsible totals EUR 17,299 million. This is an increase of EUR 273 million on the approved 2017 Budget figure.

The Ministry’s proposal includes EUR 1,212 million for interest and other expenditure on central government debt, which is EUR 96 million less than was allocated in the 2017 Budget.

The appropriations proposed for the Ministry’s sector would be used as follows:

  • 49 per cent on central government transfers to municipalities (for organising basic public services)
  • 29 per cent on pension expenditure
  • 11 per cent on EU membership contribution
  • 5 per cent on operating expenses of government agencies and public bodies.

The budget proposal also includes the administrative sector’s value-added tax expenditure, transfers to Åland, energy tax subsidies for businesses, and support for preparations concerning the health, social services and regional government reform.

Central government transfers to municipalities rise to 25.34 per cent

A total of EUR 8,434 million is proposed for central government transfers to municipalities for basic public services, which represents a reduction of EUR 163 million from the amount in the 2017 Budget.

The net decrease in central government transfers is attributable to a drop of EUR 119 million associated with the Competitiveness Pact and a downward adjustment of EUR 73 million in the distribution of costs between central and local government, alongside an increase in the central government transfer percentage from 25.23 to 25.34 per cent.

Appropriations for work on health, social services and regional government reform

For the reform of health, social services and regional government, a sum of EUR 299 million is proposed, covering the launch of county-level regional government, the establishment of service centres and support for ICT changes.

Increase in central government pension expenditure

A total of EUR 4,985 million is proposed for pensions and compensation paid by central government. This figure is EUR 148 million more than in the 2017 Budget. The increase is principally due to a rise in the number of pension recipients and, to a lesser extent, the index adjustments made to pensions.

Finland’s EU membership contribution

It is estimated that Finland’s EU membership contribution will be slightly less than EUR 2 billion. This contribution is based on Finland’s value-added tax base and its gross national income.

Operating appropriations for service centres

Within the Ministry of Finance’s administrative sector there are two service centres: Palkeet, which provides finance and HR support services, and Valtori, which provides sector-independent ICT services to government agencies and public bodies.

The budget proposal contains EUR 5 million in operating appropriations for the service centres. The service centre operations will be financed mainly through service fees charged to government agency customers.

Budget proposal will support achievement of impact objectives

The appropriations in the budget proposal will support the achievement of the Ministry of Finance’s social impact objectives. The objectives are:

  • Stronger central government finances, a reduced sustainability gap and a lower debt-to-GDP ratio
  • Improvement in municipal finances
  • Narrow tax gap
  • Clear and simple regional and local administration that supports achievement of the objectives set for public finances
  • More efficient and cost-effective functioning made possible with digitalisation and the associated control and investment models
  • Reduced costs and improved productivity in centralised services of central government in the areas of premises management, ICT services and financial and HR services.


Jan Holmberg, Financial Manager, tel. +358 2955 30156, jan.holmberg(at)